PVRs and Advertisers' Worries 519
Jurisenpai writes "Today's NYT has an article on the conflicts between PVRs and advertisers, mentioning the recent Sonicblue case, as well as Tivo and ReplayTV."
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PVRs and Advertisers' Worries
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If you want to read the article: (Score:3, Informative)
One day, maybe slashdot authors will link to the partner version and implement google style caching too :o)
The bottom line... (Score:4, Informative)
My guess is that if advertizers embraced the new technology, and started moving towards placing the advertizements in the shows (product placement, etc.), the technology could be a great boon to advertizing. But just wait... instead they'll lobby the Federal government.
I love the Heinlein quote... "There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. "
NYTimes Account info (Score:3, Informative)
Use this account info:
Username: slashdottroll
Password: slashdottroll
should work, i just set it up...
For the NYT login-impaired (text of article) (Score:1, Informative)
Digital successors to the VCR that eliminate the frustration of recording television programs have crossed a popularity threshold, raising alarm among advertisers and TV executives who see the devices as a threat to the economics of commercial television.
Digital video recorders, or DVR's, make it so easy to program and play back shows -- they do away with videotapes by storing 30 hours or more on a hard disk -- that their owners often choose to watch what is on the machine rather than what is on TV. Ignoring the networks' painstakingly planned schedules, they watch prime-time programs late at night and late-night programs before dinner, often oblivious to the channel on which it originally appeared.
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They also see fewer than half the commercials they used to, compressing hourlong shows into 40 minutes as they fast-forward through the advertisements that the television industry has long depended on to pay for its programming and profits.
One in five people who own a DVR like TiVo or ReplayTV say they never watch any commercials, according to a recent survey from Memphis-based NextResearch.
Numbers like that have provoked gloomy pronouncements from industry executives. Some even come close to accusing habitual ad skippers of theft.
"The free television that we've all enjoyed for so many years is based on us watching these commercials," said Jamie C. Kellner, chief executive of Turner Broadcasting. "There's no Santa Claus. If you don't watch the commercials, someone's going to have to pay for television and it's going to be you."
But such admonishments appear unlikely to sway DVR owners. By recording the shows they know they want to see, many say they have escaped the scourge of channel-surfing and the empty sense of wasted time so often associated with watching TV. Although sales of DVR's are still small compared with those of other home entertainment devices like DVD players, analysts say the remarkable enthusiasm they inspire makes their broad adoption only a matter of time.
"I can do e-mail and I can go on the Internet but I've never been able to program the VCR," said Kay Friedman, 66, of Morton Grove, Ill., a TiVo owner who takes special delight in waiting until 9:20 to watch "The Practice" on Sundays so she can skip through the commercials even as it records. "I'm hooked."
Dismissed until recently as too expensive and complex for the average consumer to set up, DVR's are now a fixture in more than a million United States households -- about 1 percent of the total -- a number expected to grow to 50 million over the next five years, according to Forrester Research. Fueling the growth are cable and satellite companies, who plan to build DVR features into their set-top boxes, greatly simplifying the set-up process. Cox Communications, Time Warner and Charter Communications have already announced plans to make these services available to consumers later this year.
TiVo, which markets its own DVR and licenses its service to others, costs $300 to $400, plus a $12.95 monthly fee. Sonicblue's ReplayTV 4000 costs $699 for 40 hours up to $1,999 for 320 hours of storage; the company said it expected sales to increase when it introduces a lower-priced machine later this year.
The television industry has known about DVR's for years, of course. But as the popularity of the digital technology begins to undermine many of the basic assumptions that have governed the television business for decades, broadcasters, cable programmers and advertisers are scrambling both to resist and to adapt to people who can rearrange schedules and skip commercials at the press of a button.
"You start losing marginal dollars when people who you thought you were buying are not viewing," said Daniel Jaffe, executive vice president of the Association of National Advertisers. "This is not just a theoretical problem that might be happening somewhere down the line. This is happening now."
Some advertisers are re-evaluating their buying strategies and demanding new ways of measuring audiences. Steve Sternberg, director of audience analysis for the advertising firm Magna Global USA, circulated a memo recently that asked, "If an advertiser buys `NYPD Blue' on Tuesday night, and 10 percent of its audience watches it on Friday after midnight, should that audience be given equal value as the `live' prime- time audience?"
There is an important distinction, Mr. Sternberg said, between "zipping and zapping": "When people switch channels, they are going from something to something else. There are losses for one channel, but gains for another. With fast-forwarding there are only losses."
Others are trying to turn the technology to their advantage. Coca-Cola has paid for advertising that appears on the screen of a ReplayTV user when a viewer pauses a program for more than a few minutes. Last week, Best Buy announced that it would embed electronic tags visible only to TiVo users in 30-second commercials featuring the singer Sheryl Crow it is running on MTV. Viewers can click on an icon to see 12 additional minutes of the Best Buy "advertainment," while TiVo records the continuing MTV programming so they can watch it later.
"We need to start to understand how we're going to have to reach our consumers with this new technology," said Mollie Weston, a product manager for Best Buy's image advertising. "It is going to force us to put advertisements out there that people are actually going to choose to watch."
Indeed, advertisers take heart in data from TiVo that showed its viewers fast-forwarding through this year's Super Bowl and using the instant replay function for the Britney Spears Pepsi commercial more than any other segment besides the winning field goal.
Because DVR's are connected by a phone or high-speed Internet line from a viewer's home to a central server to get program schedules, some advertisers envision downloading commercials aimed at individual people based on information from databases compiled through other sources. Members of Purina pet clubs might get pet food commercials, for instance, while the owner of a BMW lease that is about to expire might get an advertisement on the automaker's new convertible.
"There's a lot of things that are going to start to change," said Ira Sussman, director of research for Initiative Media North America, an advertising buyer whose clients include Maybelline and Home Depot. "We're going to have to start thinking more about the importance of product placement within programs, placing more relevant, highly targeted messages. But we see it as a glass half full."
His research reflected a less rosy picture for the television networks, however. "We've found people recording programs and watching them on their own time are often not realizing what network they're coming from anymore," Mr. Sussman said. "That's a real brand equity that might be lost on the networks' part, if you're trying to put something next to `Friends' but no one's watching `Friends' live."
Much of the television industry's response to the new technology so far has focused on a lawsuit that seeks to ban the sale of the newest version of ReplayTV, which allows its customers to set it up to skip commercials on playback automatically, without even requiring them to fast-forward. The machine also allows its owners to send shows to each other over the Internet.
A group of media companies including Viacom Inc., the NBC television network, the Walt Disney Company, AOL Time Warner Inc. and Twentieth Century Fox has asked a federal court in Los Angeles to stop Sonicblue from selling the device, saying it contributes to copyright infringement. To win, they need to prove that the machine is fundamentally different from the VCR, whose distribution was upheld by the Supreme Court in 1984 after a similar challenge by the entertainment industry.
Lawyers for the companies now argue that the court's endorsement of consumers' right to "time shift" television programming in the 1984 case was based on the assumption that copyright holders would not suffer significant financial damage as a result. Over the protests of privacy advocates, they are demanding detailed information about which shows ReplayTV owners record and which commercials they skip.
Sonicblue's chief executive, Ken Potashner, concedes that on average ReplayTV users skip more than half the commercials. But he says it is up to the networks and advertisers to come up with creative ways to persuade viewers to watch. The ReplayTV machine records all the commercials, and users must choose to set it to skip them automatically on playback. They can always reset it if they choose.
"What are they going to attack next, the mute button?" Mr. Potashner said. "We've provided an efficiency improvement for a consumer who is compelled to skip a commercial. What they should do is work with us."
A victory in the companies' case against Sonicblue will not stave off the fundamental shift in culture undermining their business, industry analysts say. Consumers have embraced digital technology that allows them the greatest flexibility in the way they shop, communicate and consume all kinds of media -- and it is not likely to be different in TV.
"We've trained people that you can buy things at 3 in the morning in the nude on the Internet and make a call to anyone from anywhere on a cellphone, and the idea that CBS is going to determine when I watch `CSI' flies in the face of that trend," said Josh Bernoff, an analyst with Forrester Research. "TV networks are going to have to figure out how to make money from a TV viewer that is not nailed to the chair waiting for the commercial to end."
If it is good enough, even dedicated DVR owners can still be tempted to watch live television, complete with its inconvenient interludes. Chad Little, a ReplayTV owner who started a Web site called Planetreplay.com, where viewers can trade with each other, regularly records about 10 shows, including "Junkyard Wars," and "Everybody Loves Raymond." Sometimes he makes an exception:
"Buffy," Mr. Little said, referring to the vampire slayer. "There's times I'll watch it straight through with commercials and everything."
Tivo's answer: Semi-intrusive ads (Score:3, Informative)
To bring this video to the box of (just about) every tivo user, Tivo buys time on Discovery Channel around 4:00am. They broadcast the video in the clear and have Tivo record it, but hide it from the list of recorded programs. The trigger to display the icon indicating extra available material is broadcast on a not often used (and masked by the Tivo) secondary closed captioning stream. Tivo intercepts this and acts accordingly.
Unfortunately, Tivo also adds an extra icon and menu item on the main menu, advertising the availability of (and giving you a direct link to) the videos. This isn't the first time this has happened -- Tivo "teamed" with BMW a few months back to do a similar promotion. There is a big debate [tivocommunity.com] going on in the Tivo Community Forums [tivocommunity.com] on if this is acceptable to Tivo users (who are already paying $13/mo for the service).
Space Merchants (Score:2, Informative)
Written in 1952, about a world where advertising is king.
If I were pessimistic about what the advertisers think their rights regarding commercials are, this book would be very prophetic.
Re:Q: about network schedules.... (Score:1, Informative)
I don't know SonicBlue's source, but TiVo gets its guide data from Tribune Media Services, which also publishes the same information on the web [zap2it.com] and likely in print publications all over the country. To sabotage PVRs would require corrupting TMS's database, who provides data to more people than just PVRs.
No, to corrupt PVRs and only PVRs would require TMS to take an active role in feeding misinformation to TiVo, for which TiVo could sue under breach of contract. Either that, or TMS refusing contract renewals with PVR companies.
Re:The best PVR advertisement… (Score:3, Informative)
Works for me-- 120GB HD = 90 hours of programming at "medium" quality. I've got a huge library of shows I like enough to watch a second or third time if nothing good is being recorded, and I still have plenty of space left for the 'disposable' shows that I just time-shift, watch without commercials, and delete.
~Philly
Re:One ad model they need to change (Score:5, Informative)
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Re:Difference between banner ads and TV ads (Score:2, Informative)
Re:pay-by-the-show? (Score:3, Informative)
Careful - this may not fly. Consider Canada. We're legally not allowed to pick and choose whatever channels we want, because of the CRTC's (Canada's FCC) Canadian content regulations. Cable providers are legally prohibited from delivering us a package of channels that contains less than n% Canadian content. So while I'm allowed to say "I want CBS, NBC, and ABC", I'll also be forced to pay for CBC, ATV, and MuchMusic.
Re:If they're so worried about Tivo (Score:3, Informative)
Advertisers are simply taking a gamble that 1) people will watch shows, 2) will therefore watch their ads, 3) will therefore purchase whatever it is that is being advertised.
It is EXACTLY like people who send you junk mail at their expense, hoping you'll be receptive to it. Or people who advertise in newspapers (assume free papers -- there are plenty), who pray that people won't skip past the ads to the content.
If they don't like giving away shows for free, I can't make them. But I HATE advertisements and will never ever look at one if I can avoid it. Fortunately I'm still free to take the free content.
What's the big deal? It's hardly as though free tv is sacrosanct anyway.
HOW TO TURN ON THE 30 SEC TIVO SKIP (Score:4, Informative)